Blockchain Could Help Musicians Make Money Again

As a musician, I want to encourage other artists to collaborate with my music. But recently, a visual artist had all of his Vimeo videos taken down for using just 30 seconds of one of my songs. The label that exclusively licenses one of my songs likely had a bot looking for copyright infringement that automatically took it down. I hear the artist now has them back online after a few weeks of hair loss and negotiations. I’d personally like to avoid these types of situations in the future, which means providing an easy way for others to license and collaborate with my music. A blockchain-empowered rights and payments layer could provide the means to do so.

A major pain point for creatives in the music industry — such as songwriters, producers and musicians — is that they are the first to put in any of the work, and the last to ever see any profit. They have little to no information about how their royalty payments are calculated, and don’t get access to valuable aggregate data about how and where people are listening to their music. But a rising tide of musicians and bands are pushing toward transparency and fairness in their own ways — for example, Paul McCartney’s recent lawsuit again Sony, Duran Duran’s lost battle with Sony/ATV, and Taylor Swift’s dust-up with Spotify. It’s within this climate that an enticing seed of an idea is being planted: blockchain technology has the potential to get the music industry’s messy house in order.

One of the biggest problems in the industry right now is that there’s no verified global registry of music creatives and their works. Attempts to build one have failed to the tune of millions of dollars over the years, largely at the expense of some of the collective management organizations (CMOs) — the agencies (such as ASCAP, PRS, PPL and SOCAN) who ensure that songwriters, publishers, performers, and labels are paid for the use of their music by collecting royalties on behalf of the rights owners. This has become a real issue, as evidenced by the $150 million class action law suit that Spotify is currently wrestling with. The inter-organizational cooperation that blockchain is providing for the fintech sector should inspire these “collecting societies” to use the technology to create an open (or partially open) global registry if they hope to remain relevant, which would help organize the immense amounts of new music being uploaded every day. Music creatives could build upon such a registry to directly upload new works and metadata via blockchain-verified profiles.

How Blockchain Works

Here are five basic principles underlying the technology.

1. Distributed Database

Each party on a blockchain has access to the entire database and its complete history. No single party controls the data or the information. Every party can verify the records of its transaction partners directly, without an intermediary.

2. Peer-to-Peer Transmission

Communication occurs directly between peers instead of through a central node. Each node stores and forwards information to all other nodes.

3. Transparency with Pseudonymity

Every transaction and its associated value are visible to anyone with access to the system. Each node, or user, on a blockchain has a unique 30-plus-character alphanumeric address that identifies it. Users can choose to remain anonymous or provide proof of their identity to others. Transactions occur between blockchain addresses.

4. Irreversibility of Records

Once a transaction is entered in the database and the accounts are updated, the records cannot be altered, because they’re linked to every transaction record that came before them (hence the term “chain”). Various computational algorithms and approaches are deployed to ensure that the recording on the database is permanent, chronologically ordered, and available to all others on the network.

5. Computational Logic

The digital nature of the ledger means that blockchain transactions can be tied to computational logic and in essence programmed. So users can set up algorithms and rules that automatically trigger transactions between nodes.

Blockchain has the potential to provide a more quick and seamless experience for anyone involved with creating or interacting with music. For example, listening to a song might automatically trigger an agreement for everyone involved in the journey of a song with anyone who wants to interact or do business with it — whether that’s a fan, a DSP (digital service provider such as Spotify or iTunes), a radio station, or a film production crew.

Where would this new music ecosystem “live”? One idea is .music, the soon-to-be-introduced and much-anticipated new generic top-level domain (gTLD). Decisions about its fate, and about who will be granted control of the domain, are currently on hold at ICANN (The Internet Corporation for Assigned Names and Numbers), the non-profit organization that’s responsible for coordinating and managing internet domains. Currently, DotMusic, a music community applicant, is appealing for control of the .music gTLD. But if they fail, it could potentially go to the highest bidder at auction. Some of the bidders in the running include Google and Amazon. Should the winning party do the right thing and hand over individual .music URLs to verified music creatives (for example, Paul McCartney would own paulmccartney.music and Taylor Swift would own taylorswift.music), rather than treating these new URLs as their own storefronts, it would make a lot of sense to link a blockchain-enabled ready-for-business music registry to those URLs, adding a whole new dimension for music creatives to drive business toward themselves and their work.

The blockchain could also store information about and/or link to a musician’s online profile, (or “Creative Passport,” as I like to refer to this concept), such as latest biography, tour dates, press images, and social media-style information, such as artists you champion, charities you support, skill sets, or organizations or companies you are connected to. This information could then be updated and accessible to anyone searching for that data, whether human or machine. At the song level — e.g. michaeljackson.music/maninthemirror — the blockchain could share information on all of the people involved in the making of the song, at the very least, but in addition could be linked to the metadata on specifics such as the equipment that was used to produce the song, where and when the song was recorded, the artists’ inspiration for the song, attributions, and more – sort of like extended liner notes. This could help spawn new apps and services atop of those datasets, and with them, new revenue streams for everyone involved.

Two years ago, the penny dropped for me as a musician when I was introduced to Ethereum, an open-source, public, blockchain-based distributed computing platform featuring smart contract functionality. Soon after discovering Ethereum, I dreamt up a music industry ecosystem that I called Mycelia, and used my next musical release — the song Tiny Human — as an excuse to explore the potential of blockchain further. I began by posting everything about that track on my website for anyone to experiment with and for fans to enjoy. Phil Barry at the Ujo Music platform joined in, which resulted in Tiny Human being the first song ever to automatically distribute payments via a smart contract to all creatives involved in the making and recording of the song. It was very basic — no licensing terms were exhibited — and it raised little money, due in part to the fact that you had to have an Ether wallet with Ether in it (the crypto-currency used on the Ethereum platform) before you could purchase the track, which lost some people along the way. But it nonetheless was a first step forward that generated a lot of steam for those in the business of music and blockchain.

Ease of use is one of the biggest keys to success for the widespread adoption of any new technology. The idea of a Semantic Web of linked media, artist profiles and other metadata spawning new apps with instantaneous peer-to-peer payments and exchange of data is an exciting one, but it will only become a reality for those who wish to interact with music if its solutions are better and simpler than those that currently exist. It was much easier and much more preferable for 60 million users to download music from Napster than it was to go to the store to buy a CD. It was a total failure on the part of the commercial music industry that they didn’t find a way to capture even a portion of those Napster users and turn it into a legitimate service at that time. Napster was an innovative idea that made music more accessible to music lovers. But, the RIAA (Recording Industry Association of America) chose to crush it, rather than explore the idea of sharing libraries and peer-to-peer music sharing in a legal context.

These days, however, the landscape is different and the vast majority of those wanting to listen to music head over to YouTube, which is free and perfectly legal. Astonishingly, thousands upon thousands of new songs are uploaded every day, not registered properly, and so are in desperate need of associated metadata. Surely, we can find better ways for people to both easily publish and interact with music that makes sense for everyone?

Some are trying. Organizations like Berklee’s Open Music Initiative (OMI) have managed to gather almost every party under the industry-wide sun to explain why blockchain is at least worth exploring and engaging with. And an increasing number of new all-in-one music services for artists, such as Revelator (which is blockchain-based) and Amuse (which is not) are using big data combined with audio fingerprinting to provide really useful data feedback, analysis and curation. They understand that good feedback data can be as valuable as money to creatives, enabling an artist to make business decisions with confidence and clarity. Combine this with the capabilities of social media aggregating apps like Hootsuite or Social Sprout, and artists’ partitioned online representations and scattered creative wares start to come together. Imagine being able to know, or being alerted to, when and where your music is being played. Say your song is playing on a certain channel on the radio… you could then dial the DJ to thank him for playing your song, while connecting to listeners in the moment, adding context and meaning to your songs.

Now is the time for the music industry to take the long-view look and explore blockchain together with its creatives for the sake of its sanity and future. It won’t be hard to make the business more efficient, as it’s such a giant mess right now. The larger players in the industry just need to have faith that they will make more money by doing the right thing — which would lead to fair remuneration, transparency, and a multitude of new business opportunities for artists. Simply put, if the industry is to have any clout, or any say in the sustainability of our music ecosystem, it needs to come together to develop tools and standards, so the necessary game-changing new services can flourish — but this time, under our own internet of agreements for music, where artists would be represented fairly.

I believe that featured artists — those “on the cover” — should inevitably be entrusted to ensure that everyone involved in creating music in their name will be duly acknowledged and compensated. The blockchain effect has inspired creatives in the industry that a better future lies ahead. If guided and nurtured in the right ways, blockchain holds the potential to give us a golden age of music not just for its listeners, but for those who make it, too.